tv Nightly Business Report PBS December 29, 2012 1:00am-1:30am PST
meeting today with congressional leaders that ended with no deal. ahead of that, investors lost hope lawmakers can come together in the time remaining. in the last few minutes of trading, stocks sold off. the dow tumbled 158 points, the nasdaq lost 25, and the s&p fell over 15 points. here's darren gersh with more on the critical work that has to get done in washington this weekend. >> reporter: the president declared himself modestly optimistic congress could still reach an agreement to head off huge tax hikes on january first, but he also warned lawmakers to get their work done. >> the american people are not going to have patience with a self-inflicted wound on the economy. >> reporter: senate republican leader mitch mcconnell called the white house meeting a good one and he told his fellow republicans he hoped to have a fiscal cliff recommendation soon. >> we will be working hard to see if we can get there in next 24 hours and so i am hopeful and optimistic. >> reporter: but the sticking
point remains finding something that can make it through the house with enough support from republicans. >> it seems like the 250 threshold that the president proposed previously is unlikely to pass the house in its current form, and so without some sort of additional compromise there, it seems unlikely that we're going to get something done before the end of the year. >> susie: you know thanks for that report. i am just wondering from all of the reporting you have done, do you think we are better off with a bad deal than no deal at all? >> you know susie when peopletal they are talking about a bad deal in political terms. frankly it's republicans that are most worried about the bad deal they have most leverage. the president has the most leverage. they are worried about a bad deal. any deal that gets us past the fiscal cliff is going to be seen as a good deal. >> susie: it seems like we are
further apart than last week when president obama gave the last minute pep talk to get the talks going. do we have to reach some point of pain in washington, d.c. that people get mos motivated to geta deal. how does it work in washington? >> i wish i knew.it seems that n ratcratcheting up the pain. i was surprised. i thought enough after the election would be sorted out and the fiscal cliff would be a painful enough deadline they would come together. but it seems like the pain will come when we get to the dead cliff where they must absolutely deal with. it's one area where they must focus attention and create another deadline where they have to do something and potentially a larger agreement. >> susie: real quickly this has been frustrating from everybody from wall street to ceo to average american
taxpayers. even the president saw that playing out. how do you seep see this playing out. will we have a deal on monday. >> it'we haven't heard them tal. but the hurdle remains in the house. 9 odds look like we'll go over for some period of time what bliss brings them back to a deal at that time is anybody's guess. >> susie: we'll be reporting more on monday. thanks a lot darren. washington bureau chief darren >> reporter: still ahead, harnessing the power of play. we'll take a look at how companies can benefit from giving their employees a little free time in the new year. >> susie: looks like the cliff- hanger over the nation's east and gulf coast ports, is almost over. federal mediators say dockworkers represented by the longshoremen's union and the u.s. maritime alliance are close to finalizing a new labor deal.
so close, that they've extended the deadline on negotiations by another 30 days. this heads off a strike that could have begun on sunday, crippling 14 important ports. the possibility of a strike worried retailers, manufacturers, and farmers, and risked losses in the billions. >> susie: our next guest says once the fiscal cliff mess is resolved, there will be an explosion of mergers and acquisitions in 2013. he's robert profusek, chairman of the global m&a practice at jones day.
so bob why you are so up beat about more mergers and being a acquisitions especially with everything going on with the fiscal cliff. >> it's a pessimistic time andtn the merger market. m & a has been fntastic. 9 market has been okay. it's not been at th terrible bus been good. it's been held back by the negativism that was focused on the eu and this year it's the fiscal cliff and the election and everything else. the conditions are there. we need more m. & a in this cup. >> you are saying they are notgt ablocksblockbustermega deals buo medium companies, why is that. >> to do a step out deal therehe
sense that things are good. m & a needs to be done. growth is thro slow and one of e ways to rise is to buy. everything is good but we have been held back by the negativism by the fiscal issues europe and the u.s. >> susie: you told me there were oil and gas americ mergersu think that tech could be an air yeah wirarea. what kind of gived guidelines can you give to investors so they can take advantage of these trends. >> there is a huge boom inenergd healthcarhealthcare in particule
new healthcare system is going to be a lot. you have to look at companies that have had success but need more capital to get to the next level. exploration and production companies and energy that have done well and need capital. you can raise it or you can join forces with somebody else. very often the decision is to merge and not raise capital and take that risk. >> susie: and in tech what should they look for. tech is such a huge area we have a few seconds left what are your thoughts? >> look at the base companiesan. the kind of service that's county of victoria to their -- o their base line services. >> thanks bob, have a greatweek. bob pr profusek.
>> susie: the price of gold fell slightly today, as the fiscal cliff drama in washington continues to weigh on markets and confidence. gold slipped almost $8 to $1,655. for the year, gold is up about 5%, half the gain in the s&p 500. but as erika miller reports, some gold bugs believe next year will be far better for the precious metal. >> reporter: if you got gold jewelry as a holiday gift, it may be more than something beautiful to wear. it may also prove to be a shining investment. some gold traders think the yellow metal could hit $2,000 an ounce next year. the reason? >> monetary easing. all these governments have debt and there's only one way to pay it back and it's to devalue their own currency. and it's a race to the bottom.
>> reporter: there are other factors that could also help support gold prices. central banks worldwide have been boosting their gold holdings to diversify their portfolios, and protect against inflation. this year, central banks bought roughly 500 metric tons of gold, up 8% from last year. in addition, many small investors are buying gold as a safehaven from global instability. >> political certainty is a major driving factor. it is not just here. but, in the western europe, and in the far east. and, in china. >> reporter: strong demand for gold exchange traded funds has also helped support prices. the spider gold trust-- ticker gld-- has $75 billion in assets. and it's is backed by physical gold. it also helps that some hedge funds with bylaws prohibiting them from buying futures, can buy gold e.t.f.'s.
>> so there are some people that were restricted before. they're not now, and that's supportive of the gold. >> reporter: a gold rally is not a sure thing. if there's a recession, some fear commodities like gold will drop in value. on the other hand, if the economy picks up sharply, riskier assets could become more attractive. erika miller, "n.b.r.," new york. >> susie: more signs today that housing demand is picking up: the number of contracts signed to buy homes rose in november, to its best level in more than two years. the national association of realtors index of pending sales rose almost 10% last month. so will the housing market continue to recover in the new year? that's what tom hudson asked toll brothers chief financial officer marty connor. >> the housing market willcontig as done consumer confidence maintains or improfls. and a lot of that will be contingent on resolution of the fiscal cliff and the government and the economy. >> a lot of ways to measure thet
but the most direct way for momentum home buyers and sellers is prices. do you expect that trajectory to continue? >> i do.we have raised prices ia little more than half of our communities. it's been relatively modest. but as we observe and we read stats, we are getting a lit lite more confident and may push prices a bit more in 2013. >> what are you finding in termg materials. the commodity that it takes to put up the toll brother homes. >> we are seeing that increasea. in 2012 we have seen the cost go up $4,500 a home. move o most of that was in the commodities. as we go to 2013 it's hard to predict. i don't think we'll see labor stay war i where it is and thatl increase and the commodity as well. >> do you expect it to remainch.
>> i do expect it to remainchea. the fed has made that commitment to the extent that you can call it a commitment and it's in the best interest of the continued recovery of the economy to keep mortgage rates low because housing is a vital component of employment and personal net worth. >> finally what about the homes. have you picked up on any changes o-for-consumer likes or dislikes in what consume earls are looking for in terms of the homes themselves. >> it's reasonable consistent.ie more in multigenerational living. a inlaw sweet for the parents. we are seeing a little more in terms of energy efis efficiency. we are offering more but it's not chosen as often as we would read about if you will. on the energy efficiency.
and the mcmann shu mcmann shun t dead. we are selling single family homes with 100,000 worth of upgrades to the base price. it's remarkable in the downturn. while our volume went down that option upgrade remained consistent amongst our buyers venal there is the 2013 update with martin connor. >> susie: washington was the story on wall street today. worries about getting some sort of fiscal cliff agreement continued to weigh on the markets. investors pulled money out of big cap and tech related stocks. for the week, the nasdaq composite fell more than 2%, followed by the dow and s&p 500 with similar losses.
for the second day running big board volume held steady above 500 million shares. while nasdaq volume slipped to 1.1 billion. breaking down the sectors, all 10 were lower. energy stocks led the downturn both for the day and the week. and as you can see, materials and industrials were also weak. toyota got the okay from a u.s. judge on that massive class action settlement. the lawsuit was brought by car owners who lost value on their cars because of sudden, unintended acceleration problems. toyota shares fell 0.5% to just above $92 per share. apple says it will withdraw patent claims against a new samsung phone after the company said it will not sell the phone in the u.s. but apple shares still sold off, down more than $5 to $509. barnes and noble says british media company pearson is making a $90 million investment in its nook media unit. that's about a 5% stake. back in april, microsoft made a $300 million investment in the unit. looking at the players: shares of barnes and noble jumped more than 4% to almost $15 a share. pearson slipped a fraction. and microsoft lost 1.5%. wal-mart plans to start monitoring the warehouses of subcontractors it uses here in
the u.s. the program stems from complaints of poor worker treatment at the warehouses. shares of wal-mart fell slightly closing at $67.61. some turbulence in merger talks between american airlines and u.s. airways. the two pilot unions face obstacles on contract terms. a.m.r., the parent of american airlines is still trying to get out of bankruptcy. shares of u.s. airways fell more than 2%. also in the airline space, the federal communications commission says it has established rules that will make it easier for companies to offer internet service on board airplanes. but shares of the major airlines were all down. electronic arts is ending its marketing partnership with gun manufacturers as the company tries to distance itself from the real-world sale of assault weapons. shares fell slightly to just below $14. and in the oil markets, crude prices posted their largest weekly gain since august. an industry report showed that u.s. stockpiles fell last week. a barrel of oil now sells for just under $91.
and finally, wrapping up the most actively traded e.t.f.s. the ipath s&p 500 v.i.x. saw a nice bounce of just over 5%. and that's tonight's "market focus." >> susie: our "market monitor" tonight says that going over the fiscal cliff doesn't mean stocks will go down. he's tom herzfeld, president of thomas herzfeld advisors. >> tom you saw today thereactioe worries of the fiscal cliff. why do you think otherwise. >> i'm not as concerned aboutt e
you have been speaking with. i'm a bull on the fox and i stos and i would regard it as a adverse opportunity. >> susie: you are saying there are some nice opportunities there. you have two equity funds therement let's start with the clo wait w opportunity. it's trading at a 14% discount and paying out a 9% difficult tend difficul dividend. it's good stock for 2013. the other stock petroleum and resource they are under valued right. >> they pay out 6% and they arey revise it the stock will go up and the discount will narrow.
>> let's switch gears.you think3 is cuba. why should we look at cuba stocks. >> i think president obama want. interestingly the employment of senator kerry who favors the embargo is significant. cuba wants it limi lifted and we positioned the por port feel p o the lifting. >> susie: why do you like seaboard. >> seaboard is $250 a share whes 2500 go a share has ships off the caribbean. they will get a enormous boost in business after trades resume with cuba.
>> susie: your next one wso. tell us about this company and why it's good for american investors? >> another example of what weha. companies that have been doing well now even if there is no change in cuba. i think the country of cuban has to be air conditioned. they are going to get a tremendous amount of business when the embargo is lifted. >> susie: what target t do you see on this stock price? >> i don't have a target butit'a long term in our por portfolio. >> carnival cruise line. >> carnival and royal caribbeanf new business. not only people traveling to cuba but people com combining vacations with a trip to cuba. it's a win win for the cruise
linings if the embargo is lifted. >> one area you would like thei. that is a fiscal cliff area. >> closed american bond fundsaee leveraged and we think the dividends are going to be cut and there is a risk we would just avoid them. >> do you own any of theserecom? >> for our discretionaryaccounte closed end accounts and the herzfeld caribbean accounts olds all of the those we spoke of. >> susie: thank you very much tom. or our market monitor tomorrow herzfeld. coming up on monday on "n.b.r." we'll be monitoring those fiscal
cliff negotiations, and we'll have news and analysis. we'll also a look back at the year in stocks, and s&p's sam stovall joins us to pre-view what's next for the markets in the year ahead. it could be one of the biggest trends in business next year: companies setting aside time for their employees to play. ruben ramirez explains. >> reporter: it may be hard to remember those hot summer days on the playground. the freedom to let your mind wander. how times have changed. as companies slashed jobs during the great recession worker productivity surged, today, many people are doing the job multiple people once did. >> i think our culture has gone in some direction where we feel like if we took a break we'd be considered irrelevant in the workplace and they don't need me. >> reporter: cary umhau's firm spacious is trying to re- introduce the idea of play to the workplace. tech companies have embraced play for years. at google employees get one day a week to work on their own projects.
gmail and google news were born from that free time. >> increasingly you'll see businesses embrace play or unstructured play, unstructured time because that begets imagination, innovation and creativity. all of which are competitive advantages in today's world. >> reporter: twitter and facebook are famous for their hackathons, where employees get to test out new ideas. >> i think we are at the forefront of changing this culture where people would say no it's actually going to be good for the bottom line if our people are happy and flourishing. >> reporter: americans feel their lives are out of balance, 70% feel they've always got something coming at them that needs immediate attention. their day-to-day has become more structured and less free flowing. and, technology is also having an impact, smartphones and email mean it's rare people are every truly alone with their thoughts. >> if you allow yourself some time to breathe, some time to play, it refreshes you, it helps
your mind function better. >> reporter: while not every industry may be ready to introduce play corners in their workplaces, nearly 80% of americans say they wish they could recapture some of the imagination, fun and creativity of their childhood. ruben ramirez, "n.b.r.," new york. >> susie: as 2012 winds down, the end of the year is often a time when we reflect. tonight, "lou's been thinking" about old friends and the best gift ever. here's author and educator lou heckler. >> in the past few weeks, i have lost three friends. i know it's part of getting older, and it still gets you thinking: how will we be measured? poet philip james bailey writes: we live in deeds, not years, in thoughts, not breaths, in feelings, not figures on a dial. there are many deeds to recount in business: profit and loss
estimates, new product introductions, new markets entered and conquered. all are notable deeds in their own way. for my part, i could think of degrees earned, positions held, places traveled, ideas shared. somehow they pale compared to the older woman who approached me after a speech i gave at a senior citizens group in florida. i had talked about the healing power of humor and she waited tentatively to speak to me when the speech was over. thank you so much, she said, taking my hands in hers. i told her i should be thanking her, this was a wonderful audience. no, you don't understand, she continued. my husband died seven months ago. today is the first day i've laughed. in all my years, that's a deed i'll always remember, a gift i gave that came back to me ten- fold. i'm lou heckler. >> susie: that's "nightly business report" for friday, december 28. have a great weekend everyone, we'll see you online at: www.nbr.com and back here monday night.